Sensex rises 1,200 pts from day's low, Nifty reclaims 24k, but still down 1.6%: Key reasons behind market rebound

Sensex rises 700 pts from day's low, but still down 2.3%: Crude oil relief, other reasons behind partial market rebound

• Sensex and Nifty partially recovered after crude oil price relief
• US oil prices dropped sharply as G7 considers releasing reserves
• IT stocks saw minimal decline, Nifty IT index down just 0.4%

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Benchmark indices Sensex, Nifty staged a partial recovery on March 9 due to various reasons, including partial relief in crude oil surge.

At 3:04 pm, the Sensex was down 1,267.58 points or 1.61% at 77,651.32, and the Nifty was down 399.50 points or 1.63% at 24,050.95. About 781 shares advanced, 3,248 shares declined, and 123 shares were unchanged. Sensex rose 1,200 points from day's low and Nifty reclaimed the psychologically important 24,000-mark. The intraday low of Sensex was 76,424.55 while that of Nifty was 23,697.8.

Sun Pharma, Reliance Industries, Apollo Hospital, Max Healthcare, Infosy, Cipla and Wipro were the gainers in the Nifty 50 index. On the other hand, State Bank of India was the worst hit stock in the index. It was down over 5%. Banking stocks were the major laggards as a rapid rise in oil prices exacerbated fears of higher inflation and higher government bond yields impacting their treasury income. Shares of Shriram Finance, Jio Financial Services, Kotak Mahindra Bank, Bajaj Finance, and Bajaj Finserv were down 2-4%. Automobile companies Tata Motors Passenger Vehicles, Maruti Suzuki India, Mahindra & Mahindra, Eicher Motors, and Bajaj Auto were down 4-5% as well.

All the broader market indices were in the red, down around 3% each. The Nifty Midcap 100, which fell nearly 3%, was weighed down by shares of Bharat Forge. The stock was down 5%. The Nifty Midcap 150, down nearly 3%, was weighed down by the shares of Bank of Maharashtra, which fell over 6%.

All the sectoral indices were down as well. Nifty PSU Bank was the worst hit among them, down nearly 5%. Shares of Bank of Maharashtra, State Bank of India, Union Bank of India, Bank of India, and Indian Bank fell 5–6% and weighed down the index.

In the Nifty 200 index, shares IT companies Persistent Systems, LTIMindTree, and HCL Technologies gained around 1% each. In contrast, Hindustan Petroleum Corp. was the worst hit stock in the index and fell nearly 7%. In the Nifty 500 index, Sonata Software was top gaining stock, up nearly 4% and Tejas Networks was the worst hit stock, down over 7%.

Key reasons behind partial market rebound

1. Crude oil relief

US oil prices fell $16 per barrel in under two hours on March 9 and were trading below $103 per barrel on reports that G7 countries are considering releasing 400 million barrels of crude oil reserves.

The ministers will hold the emergency discussion at 8.30am New York time alongside Fatih Birol, executive director of the International Energy Agency (IEA), according to people familiar with the situation, including a senior G7 official cited by the Financial Times. The talks will focus on the impact of the Iran war on global energy markets.

Three G7 countries, including the United States, have so far expressed support for the proposal to release oil from strategic reserves, the people familiar with the discussions told the Financial Times.

Officials cited by the newspaper said some US policymakers believe a coordinated release of about 300 million to 400 million barrels could be appropriate. That would represent roughly 25 to 30 percent of the 1.2 billion barrels currently held in strategic reserves by IEA member countries.

The intensifying Iran conflict deepened supply concerns, pushing Brent crude up more than 26% to about $119 a barrel on Monday, sharply accelerating last week's rally.

Oil prices rose more than 50% since the outbreak of the US-Israeli war on Iran, leading to a broad risk-off shift in markets and pushing investors towards the safe-haven dollar.

2. IT, pharma outperform

Heavyweight IT stocks saw the least impact of the crude oil surge and the Nifty IT index was trading in green.

Weaker rupee also kept the losses capped on the sectoral index. LTIMindtree, Wipro, Persistent Systems led the gains on the index. Defensive sector like pharma also performed relatively well with it trading only marginally lower.

The Indian rupee fell to a record low, while the benchmark 10-year bond yield rose 7 basis points to 6.76%.

3. Technical level

An analyst said further fall in markets will happen only after Nifty falls below 23,535.

"A plunge to 23,535 is awaited that would complete a 61.8 retracement of the up move since March 2025. Breach of the same should see multi leg downsides initially aiming the March 2025 low near 22,000 and November 2023 low near 19,000. Near term upside prospects depend on the ability to float above 24,000," said Anand James, Chief Market Strategist, Geojit Investments.